Bitcoin (BTC) experienced heightened volatility in the past week. The price rebounded from a low of around $56,500 during the week to close above $64,000, representing a modest gain of approximately 1.5% compared to the previous week. This indicates that sentiment remains positive, and bullish investors are buying at lower levels.
According to data from Farside Investors, spot Bitcoin exchange-traded funds saw net inflows of $378 million on May 3. Of particular note was the $63 million inflow into the Grayscale Bitcoin Trust ETF, the first inflow since its conversion into a spot Bitcoin ETF in January. Although it is too early to make a definitive conclusion, early indications suggest that the continuous selling in the GBTC may come to an end.
Bitcoin’s recovery in 2024 has helped the industry attract over $1 billion in venture capital funding for two consecutive months in March and April, according to RootData. This marks the first time this has occurred since October through November 2022.
Now let’s analyze the charts to identify the key resistance levels to watch for in Bitcoin and altcoins.
S&P 500 Index:
The bears are struggling to keep the S&P 500 Index below the moving averages, indicating strong buying at lower levels. If buyers can maintain the price above the 50-day simple moving average (5,131), it will suggest that the corrective phase may be over. The index may then attempt a rally to the all-time high at 5,265, where the bulls are likely to face significant selling pressure. A sharp downturn from 5,265 could result in a period of consolidation, while a break above this level would indicate a resumption of the uptrend with a potential rally to 5,500. Key support levels on the downside are 5,000 and then 4,950.
U.S. Dollar Index:
The U.S. Dollar Index (DXY) was rejected from the overhead resistance at 106.50 on May 1, indicating strong defense by the bears at that level. The bears pushed the price below the 20-day exponential moving average (105.43) on May 2 and extended the decline to the 50-day simple moving average (104.56) on May 3. However, solid buying emerged at lower levels, as shown by the long tail on the May 3 candlestick. If the price turns down from the 20-day EMA, it will increase the likelihood of a drop to the support line of the ascending channel. On the other hand, a break above the 20-day EMA could propel the price toward 106.50.
Bitcoin:
Bitcoin broke above the 20-day EMA ($63,556) after a minor hesitation, but it failed to surpass the 50-day SMA ($65,937). Both moving averages have flattened out, and the RSI is near the midpoint, indicating a period of range-bound action in the near future. The BTC/USDT pair is expected to remain between $56,500 and $73,777 for some time. A break and close above the 50-day SMA could attract further buying, potentially pushing the pair to the crucial level of $73,777. However, strong resistance is expected at this level, and a breakdown could initiate the next leg of the uptrend towards $80,000.
Ether:
Ether (ETH) broke out of the 20-day EMA ($3,143) on May 6, but encountered strong selling pressure from bears, as indicated by the long wick on the candlestick. Sellers will attempt to push the price down to the important support at $2,850, which is a critical level to monitor as a break below it could result in a decline to the support line of the descending channel. However, if the price turns up from the current level and breaks above the resistance line, it would suggest a potential trend change with a possible rise to $3,730.
BNB:
BNB rose above the moving averages on May 3, signaling that the bulls are attempting to push the price to the overhead resistance at $635. The bears have successfully defended the $635 level on four previous occasions, so they will likely try to do the same again. A sharp downturn from the overhead resistance would suggest that the BNB/USDT pair may continue to oscillate between $495 and $635 for some time. However, a break and close above $635 would indicate a resumption of the uptrend and potentially lead to a climb to $692, where strong resistance is expected. On the downside, the bears would need to keep the price below $495 to gain control.
Solana:
Solana has been trading within the range of $126 and $162 for several days, indicating indecision about the next directional move. The flattish 20-day EMA ($146) and the RSI just above the midpoint suggest that range-bound action may continue for a while longer. If the price remains above the 20-day EMA, the SOL/USDT pair could rally to the overhead resistance at $162, where buyers may struggle to overcome the obstacle. However, if the bulls manage to push above $162, the pair may accelerate towards $205, which is likely to act as strong resistance. On the downside, a break below the 20-day EMA could send the pair down to $126.
XRP:
XRP has moved above the 20-day EMA ($0.53) on May 6, indicating a potential end to the corrective phase. The flat 20-day EMA and the RSI just above the midpoint suggest a balance between supply and demand. If the bulls can push the price above the 50-day SMA ($0.56), it would tilt the advantage in their favor and potentially lead to a climb to the strong resistance at $0.67. However, the bears will likely try to defend the 50-day SMA and pull the price back below the 20-day EMA. If they succeed, the pair may drop towards the crucial support zone between $0.46 and $0.41.
This article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.